Growth in the U.S. manufacturing sector slowed by much more than anticipated in the month of February, according to a report released by the Institute for Supply Management on Friday.

The ISM said its purchasing managers index dropped to 54.2 in February after climbing to 56.6 in January. While a reading above 50 still indicates growth in the manufacturing sector, economists had expected the index to edge down to 55.5.

"Comments from the panel reflect continued expanding business strength, supported by notable demand and output, although both were softer than the prior month," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.

The report said the new orders index fell to 55.5 in February from 58.2 in January, while the production index slumped to 54.8 from 60.5.

The employment index also slid to 52.3 in February from 55.5 in January, suggesting a slowdown in the pace of job growth in the manufacturing sector.

On the inflation front, the prices index edged down to 49.4 in February from 49.6 in January, indicating lower raw materials prices for the second straight month after nearly three years of increases.

"The manufacturing sector continues to expand, but inputs and prices indicate easing of supply chain constraints," said Fiore.

Next Tuesday, the ISM is scheduled to release a separate report on activity in the service sector in the month of February.